Fine & Country Regional Market Report Winter 2024 - Wales

WINT ER 2024

W A L E S M A R K E T U P D AT E

WALES

£474,000

£614,791

-3%

£334

£919m

67

68,303

8.3%

41.5%

RESIDENTIAL TRANSACTIONS (OCT)

100,410

3.0%

21.0%

GROSS MORTGAGE LENDING (OCT)

£20.2bn

-4.6%

26%

52,249

-7.5%

-14.4%

228,853

-

-6.5%

MORTGAGE APPROVALS (OCT)

NEW HOMES BUILT (Q324) NEW HOMES BUILT (ANNUAL)

2

P RE M I U M M ARK E T S

W AL E S

RESILIENT MARKET

The outlook for 2025 is cautiously optimistic, with increasing buyer activity and a growing sales pipeline. Affordability, while still stretched, is improved compared to a year ago, while mortgage rates below their recent peak and inflation coming under control are expected to unlock pent-up demand, creating modest upward pressure on prices.

LOOKING BACK LOOKING FORWARD Inflation started 2024 at 4.0% and has steadily come under control throughout the year (ONS). Despite a higher than expected reading of 2.3% in October, it is forecast to remain close to its 2% target throughout 2025. Interest rates have fallen by 0.5 percentage points since August, down from 5.25% to 4.75% in November, giving an optimism boost to the market. Interest rates are not expected to reach the lows of the last decade anytime soon, instead forecast to drop to 4% or lower by the end of 2025¹. Average asking prices for new sellers are predicted to rise 4% in 2025, the highest forecast since 2021 (Rightmove).

PRICE GROWTH House prices grew 3.7% in the year to November, their fastest annual pace for two years after seeing the largest month-on-month increase since March 2022 (Nationwide).

Low levels of unemployment, combined with wage growth outstripping inflation, is helping underpin the housing market.

In Wales, the prime markets of Pembroke/ Tenby and Neath are currently the best performing.

STRONG PIPELINE Mortgage approvals reached 68,303 in October, a 42% year-on-year increase and the highest level since August 2022 (Bank of England). Despite mortgage rates not having come down since the budget, average mortgage rates have been steadily dropping since spring, now over 160 basis points lower than in summer 2023 (Halifax). The sales market is on track for 1.1m sales completions over 2024, a 10% increase compared to 2023, with the current sales pipeline 30% larger than at the same time last year (Zoopla). Supported by rising incomes and changes in the way lenders assess affordability,

5% more sales are forecast over 2025 compared to 2024.

People’s motivations to sell and move are commonly underpinned by needs rather than aspirations. Over 1 in 5 moves are ‘needs based’, driven by factors such as moving near family, rising costs, divorce/ separation, and job relocation2.

IMPROVING AFFORDABILITY Moderate house price inflation, coupled with strong wage growth, means buying a home is becoming more affordable relative to income (Halifax). Over the last year, average earnings have climbed by +5%, outpacing house price growth. Mortgage costs are also lower than where they were a year ago in each region of the UK, encouraging news for buyers. In Wales, mortgage costs as a percentage of income fell to 24.5% from 28.8% between Q3 2023 and 2024³.

However, affordability still remains stretched for many, with prices still near record highs and interest rates likely to stay higher than we’ve been used to over the past decade.

CHANGING PATTERNS The proportion of households owning their accommodation in Wales has decreased slightly over the last decade, from 67.8% to 66.4%⁴. Despite this, Wales has the youngest average age for first-time buyers in the UK, at just 31 years⁴.

The rental sector however, is growing, with the proportion of households renting having risen from 30.6% to 33.5% over the last 10 years. Renters are increasingly valuing stability and prefer to stay put for longer, with 48% having an ideal lease length of 24 months or more, compared to 34% who prefer 12 months or less⁴. When it comes to renting versus buying, two-thirds (66%) of renters in Wales ideally prefer to buy, 17% would prefer to rent, with the remaining 17% not minding either way.

¹HM Treasury, Average of Independent Forecasts November 2024. 2Dataloft (PriceHubble), Property Academy Home Moving Trends Survey 2024. ³Halifax, based on a 5-year fix, 25% deposit, 30-year term, average interest rates. ⁴ Census 2021, Mojo Mortgages, Dataloft (PriceHubble), Property Academy Renter Survey 2024, Welsh renters

P RE M I U M M ARK E T S

W AL E S

3

£405,000 £539,732 -3.1% £292

£514,000 £705,228 -2.7% £372

£572,000 £755,877 -2.8% £383

£524,000 £691,541 -1.1% £340

£474,000 £614,791 -3% £334

£794,000 £1,077,664 -4.5% £529

£742,000 £1,006,298 -4.9% £490

4

P RE M I U M M ARK E T S

£496,000 £671,507 -3.4% £349

£925,000 £1,307,044 -8.7% £570

W AL E S

£1,570,000 £2,547,078 -10.8% £1,233

WALES PREM IUM M ARK ET

£400,000 £492,859 -10.2% £281

£326,000 £417,114 +2.3% £225

£329,000 £410,712 -4.3% £251

£504,000 £732,158 +4.4% £351

£457,000 £600,255 -0.5% £321

£425,000 £555,600 -5% £308

£675,000 £936,088 +0.6% £411

£579,000 £721,668 -2.8% £397

P RE M I U M M ARK E T S

W AL E S

5

WALES PREM IUM M ARK ET

WALES

0% -0.5% -1% -1.5% -2% -2.5% -3% -3.5% -4% NOV 2023

DEC 2023

JAN 2024

FEB 2024

MAR 2024

APR 2024

MAY 2024

JUN 2024

JUL 2024

AUG 2024

SEP 2024

OCT 2024

WALES

£400 £350

£ 364

£ 357

£ 334

£300

£ 334

£ 309

£250 £200 £150 £100 £50 £0 DETACHED

6

P RE M I U M M ARK E T S

W AL E S

SEMI-DETACHED

TERRACED

FLAT/APARTMENT

ALL PROPERTY

WALES M AINST REAM M ARK ET

WALES

5% 0% -5% -10% -15% -20% -25% -30% -35% OCT 2023

NOV 2023

DEC 2023

JAN 2024

FEB 2024

MAR 2024

APR 2024

MAY 2024

JUN 2024

JUL 2024

AUG 2024

SEP 2024

WALES

£320 £280 £240

£ 261

£200

£ 214

£160

£ 212

£ 207

FLAT/APARTMENT

ALL PROPERTY

£ 169

£120 £80 £40 £0 DETACHED

SEMI-DETACHED

TERRACED

P RE M I U M M ARK E T S

W AL E S

7

WALES

£196,380 £474,000 £614,791

£135,918 £298,000 £386,738

£149,981 £323,000 £408,391

£199,630 £386,000 £492,777

£315,339 £642,000 £817,293

£202,869 £484,000 £627,403

2024-12-02